Glencore buys out Dan Gertler, Israeli businessman accused of bribing DRC’s President Joseph Kabila

It’s hard to imagine a more fitting embodiment of the sad story of economic vandalism in the DRC than the friendship between Israeli businessman Dan Gertler and President Joseph Kabila. Regular readers know that Gertler’s pillage of the DRC is a pet topic on this blog – see here, here, here and here, for example.

Now FT’s  has yet another story on how mining giant Glencore has been forced to buy out Gertler over accusations of bribery:

After years of doing business together in one of the world’s poorest countries, Glencore has dissociated itself from Dan Gertler, an Israeli mining tycoon implicated in the payment of bribes to the ruler of the Democratic Republic of Congo.

Glencore’s announcement last month that it would pay $534m to Mr Gertler to buy him out from their shared prize assets in the DRC — two giant copper mines — is designed to insulate the London-listed mining cum trading behemoth from the fallout of a widening corruption investigation involving the Israeli businessman, say people who have followed the saga. The decision by Ivan Glasenberg, Glencore’s chief executive, highlights the risks of doing business in the resource-rich, war-torn central African country, where Mr Gertler wields influence by virtue of his close friendship with Joseph Kabila, the DRC president.

Settlement documents released in September by US authorities in a scandal involving Och-Ziff, the New York hedge fund, alleged that an “Israeli businessman” — whose description clearly matches Mr Gertler — had paid bribes to Mr Kabila in order to obtain special access to mining rights in the DRC.

One banker who does dealmaking in the mining sector and owns Glencore shares says the company’s purchase of Mr Gertler’s stakes in the two DRC copper mines is defensive. “Buying out Gertler is primarily about detoxification for Glencore,” he adds. “The Och-Ziff investigation in the US has made it very risky to have clear ties to him.”

More on this here. Definitely worth a quick read.

President Joseph Kabila was paid $7m in bribes. Dan Gertler’s buyout is worth $534m in cash, paid by Glencore.

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subsidiary of british firm suspends ore imports from congo

It is not a secret that the war in eastern DRC is more than anything else economic. The trade in charcoal and a litany of minerals has forever been blamed for the conflict that has killed, maimed or displaced millions of Congolese. It is therefore encouraging to learn that Thailand Smelting and Refining Co. (Thaisarco), a subsidiary of British metals giant Amalgamated Metals Corporation (AMC), has suspended the import of tin ore (cassiterite) from the Congo because it believes that the trade in the mineral might be financing the Congolese civil conflict.

The move has however been criticised by Global Witness, an advocacy group.Global Witness argues that if AMC is indeed concerned about the financing of the conflict then instead of cutting and running it should contribute in the setting up of a proper industry-wide system of checks on all sources of metals. The cessation of imports, argues Global Witness, does nothing for artisanal miners in the Congo who depend on trade in metal ore for their livelihood. It also does nothing to stop the trade in ‘blood’ metals in general from the Congo.

Citing a 2002 UN Report that accused AMC and its subsidiary (among other firms) of breaching OECD guidelines for Multinational Enterprises, Global Witness said that AMC and Thaisarco had always known that their activities in the Congo were funding the conflict there.

AMC and Thaisarco cited “the threat of misleading and bad publicity” as their main reason for halting their trading operations in the DRC. Kudos to Global Witness for their campaign against militarized exploitation of minerals in the DRC. I hope this sets a precedent for the many foreign firms that continue to profit by trafficking in minerals from the Congo – at the expense of millions of innocent women and children… and men.